Saturday, May 18, 2024

Why Anil Agarwal is seen more as an encroacher than a corporate czar

Thursday, May 31, 2018, 17:23
This news item was posted in Business category and has 0 Comments so far.

If oil and gas giant BP spilt oil in the Gulf of Mexico, then-mining companies BHP Billiton and Vale contaminated the bucolic Brazilian countryside in 2015. Look around you. Mining and natural resources corporations have always been vilified for their extractive methods and windfall profits at the expense of communities and carbon footprint.Indian corporates that have made their billions in commodity and metals have also not been spared. Kumar Mangalam Birla’s got scalded in Coalgate. The Ruias of Essar and Gautam Adani have been ‘Greenpeaced’ at home and in Australia, while Sajjan Jindal became the favourite whipping boy after the Karnataka Lokayukta report on illegal mining. The Teflon Tatas, too, have come under activist attack. In this litany of corporate transgressors, Vedanta chairman Anil Agarwal is a special category by himself.Think about it. He wears his nationalism on his sleeve, spends millions on the girl child campaign, bids for airports and other marquee projects to support GoI’s development agenda, yet gets drawn into controversies like no other. He’s the magnet of bad press. From Lanjigarh to London and now Tuticorin, Agarwal and Vedanta have been pilloried, reviled and rebuked by the British government, Rahul Gandhi, pop icons, green lobbyists and even conscious capitalists for his mining exploits, and apparent failure to respect the rights of indigenous tribes.Truth be told, the noises are largely specific to just three of his assets in an otherwise diverse and expansive empire. Tamil Nadu’s Tuticorin, Odisha’s Lanjigarh and Zambia’s Konkola mines have always given him the maximum pain value. We don’t hear much about the smelters in Jharsuguda in Odisha and the core of his business, or Hindustan Zinc, his biggest cash cow, or even Cairn Energy. Before the illegal mining campaign, even Sesa Goa, his earlier slot machine, remained relatively insulated.Always an underdog, who started as a scrap dealer, Agarwal’s grandiose dreams are often at loggerheads with ground realities — or those literally under it. Till a decade back, he was the challenger to the Birla empire. Having outgrown them, he now wants a seat at the global high table.In retrospect, it is this aggression that got him into trouble in Odisha. Most of his peers would have waited for all permits to have come in before committing so much capital on an aluminium smelter. But in their zest to ramp up and be quick to market, Agarwal chose to be swayed by Odisha chief minister Naveen Patnaik’s promises. The pushback was instantaneous, as people saw a marauder with scant regard for their consent or customs.Fundamentally, Thoothukudi, or Tuticorin, is no different. It’s also about expansion and de-bottlenecking. Since 1994, the Tuticorin project has been under severe scrutiny on the back of gas leaks, litigations and local ire. Its genesis was no less controversial.Three industry-friendly states had rejected Agarwal (in Maharashtra, it had meant destroying mangroves in Ratnagiri) before Tamil Nadu chief minister J Jayalalithaa invited him to set up the plant. In 2003, even his own board members wanted an independent green audit done. With such a legacy, Vedanta should have engaged with the community a lot more than what it claims it did.And now there is blood.In Africa too, Agarwal has tried to do what even mining giant Anglo American could not: balancing water table, pollution and local concerns as he built new shafts to go deeper underground in search of the mineral.Like always, after the Tuticorin killings, the company has blamed foreign NGOs, faceless business rivals, for the smear campaign. It would do better to look inward.Globally, mining corporations are being forced to come out of their holes and be more responsible. It’s an engagement that goes beyond investing in hospitals and schools, or sponsoring the London chapter of the Jaipur Literature Festival into something deeper and more sustainable. For Agarwal, this is still a work in progress.In 2014, at the peak of the Niyamgiri issue, Agarwal pledged 75% of his wealth — at $3.5 billion, among the largest corporate grant ever — to charity. Yet, even today, despite several revisions and kick-starts, mega promises like a billion-dollar university in Odisha remain a pipe dream. (A top-of-the-line cancer care facility in Chhattisgarh, though, is functional.)Therein lies the second problem. Even if the intent is right, Agarwal comes across as transactional and opportunistic. At times, even his financial investors have gone against him to block perceivably sharp corporate manoeuvres. And without a doubt, his thin non-operating teams have let him down, time and again.Which is why he needs more than ever an entity like Anglo American, a fifth of which he has already cornered. It’s human resource and professional management that he is after — even though officially his about 20% stake is just “an investment”.For, in the end, you may be the best financial brain to turn around assets — which arguably he is — but without empathy, you’ll always be the encroacher.

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